How behavioral segmentation can change your business

24 March 2020

Jadwiga Kijak

Senior UX Researcher

Patrycja Rudnicka

Research Expert
Jadwiga Kijak Patrycja Rudnicka
How behavioral segmentation can change your business

Online customer behaviors can be more and more easily analyzed, using dedicated tools and qualitative methods. Identification of common behavioral patterns is the basis of behavioral segmentation, and thanks to psychographic profiling, we also learn about the customer's motivations and their sources.

Who is your customer?

The better you get to know current and potential customers, the easier it will be to tailor a product, service, or an offer to their needs, expectations, and restrictions.

The most important questions you should know the answer to:

  • Who buys your products?
  • Why are they buying them?
  • Why do they buy them from you?
  • How to attract new customers and build their loyalty?
  • What do your customers like? What they don't like?
  • What motivates them? What annoys them?
  • What are their problems and needs? How do they currently satisfy them?
  • Where do your customers look for product information?
  • How are they looking for them? What phrases do they use?
  • How, when, where, and for how much do they buy it?
  • How to reach them?
  • What are their habits related to using your product or service?

Making business decisions based only on rudimentary information or intuition, not data-supported knowledge, can result in a colossal failure that even major giants such as Kodak and Blockbuster have suffered. If you care about efficient communication with customers and effective scaling of your business, then first look for the answers to the above questions.

Why?

  1. You will find out who your customers are and what they need
    - what motivate them to use your services,
    - how quickly they adopt new technologies,
    - with which channels are you able to reach them.
  2. You will be able to anticipate their needs and frustrations
    Knowledge of motivation, complaints, and customer behavior will help you to predict what new problems, challenges, and frustrations will appear in their lives. This enables you to adjust the offer to exactly what they need or will need shortly.
  3. You will invest in projects and functions based on real needs, not on questionable assumptions, guesses, or incomplete data.
  4. You will learn how to speak to our customers
    Effective communication of the benefits of using a product or service is only possible if we know the needs, motivations, problems, values, ​​and even personality traits of the people we want to reach.

Where to get knowledge about customers?

Segmentation is the division of customers into groups according to established criteria. The most common elements for segmentation are geographical (customer location), demographic (age, gender, education, economic status, family, and life situation), psychographic (lifestyle, values, attitudes, personality), and behavioral (intentions, product knowledge, shopping-related behaviors, loyalty, commitment, etc.). We can say that each subsequent category of segmentation provides us with more in-depth knowledge about the customer, and as a result, increases the accuracy of the selection of optimal messages and allows us to gradually increase the value proposed to customers.

Behavioral segmentation allows differentiating users according to behavioral criteria to identify their specific needs, reveal opportunities to optimize their experience with a product

Schemat pracy nad przygotowaniem segmentacji behawioralnej.

Diagram of work on the preparation of behavioral segmentation.

For example, in the e-commerce industry, customer behavior can be easily identified using analytical tools as well as qualitative methods. Common behavioral patterns distinguished according to various criteria, for example place, object, or time, are the basis for segmentation.

Interesting results bring psychographic profiling, which allows you to find the characteristics and properties of the customer determining the desired behavior. We most often analyze personality traits, attitudes, and value preferences. Thanks to in-depth insight into the determinants of motivation and behavior, we can better understand why the customer acts in such a way, learn and meet his needs, as well as anticipate further actions by combining them with the product strategy.

Based on behavioral segmentation and psychography, we have made recommendations and functional guidelines for the newly created product, which was the payment gateway – Paynow. The project, which we implemented in cooperation with mBank, was based on knowledge about the needs, habits, limitations, and complaints of online store owners. During usability tests the product was very well assessed by the target group, which proves the effectiveness of such an approach – including the questions about when the solution will be available on the market.

Needs research

Behavioral segmentation is the result of needs research. During research sessions, we meet representatives of a selected group and talk about ways in which they deal with selected problems, and how they use specific products. At the same time, we deepen this conversation about topics related to the behaviors, motivations, needs, and opinions.

An example of behavioral segmentation prepared in the process of creating mBank's payment gateway – Paynow.

Conducting a needs research allows you to:

  • define the personality traits, attitudes, values, interests, and lifestyles of clients,
  • understand and learn their needs and motivations,
  • gain in-depth insight into their behavior,
  • identify key behavioral patterns that differentiate clients,
  • learn about their preferences related to the services you offer.

Segmentation obtained as a result of the research is an invaluable resource for the company and its various departments. These include:

  • the base for the market strategy,
  • the basis for creating new products,
  • means to eliminate risk,
  • a tool to match the product to market needs,
  • help in optimizing the product offer,
  • tips for the direction of product development,
  • support in defining strategic goals.

Behavioral segmentation is a tool that allows you to build products ideally suited to the target group. As a result of research, we gain in-depth insight into users' motivations and behaviors, we find the answer to the question why they work this way, and we can create directional and functional recommendations for the emerging product or optimize an existing solution.

Thanks to behavioral segmentation, the onboarding of new employees or external agencies into the project will be much faster and more efficient. Knowledge of customer segments and their behavioral features should be the basis for all product actions and decisions.

Participation in research turns out to be valuable also after the end of the project. When I train mBank employees, I can refer to the specific examples, pay attention to real customer problems, which we can solve thanks to the payment integrator, which we created in cooperation with Mobee Dick.

Kamil Łucki

company development expert in the Corporate Customer Department, mBank

 

Research without restrictions

Thanks to the proper selection of methods and tools, we can also conduct research sessions remotely. This means unrestricted access to selected groups of recipients, regardless of where they are. At Mobee Dick, we have developed effective procedures and good practices that allow us to minimize the challenges associated with this form of research sessions and remote cooperation.

Research conducted in such a way also provides opportunities for the participation of a larger number of observers, thanks to online transmission. Recorded and described sessions enable a return to the most important insights.

Benefits

The use of research increases the chances of market success. Thanks to them:

  • you minimize the risk
    You make better business decisions based on facts rather than guesses and avoid creating a product unsuited for the market.
  • you reduce unnecessary costs
    You verify product or service functions at the stage of creating a product strategy or design, thereby avoiding the costs associated with their implementation and reducing the number of changes at later stages of the project.
  • you forecast better
    You know the real needs of your customers and the problems by which they resign from your product or using the service.

By opting for research, you increase your chances of creating a product or service ideally suited to the target group. You effectively plan product development and make the right decisions related to its optimization.

If you want to know more about the benefits of research that we implement, please contact us!

Questions?
Let's talk